Hailey Johnson
The Federal Reserve Bank of New York is the custodian of gold bars owned by account holders such as the US government, foreign governments, other central banks, and official international organizations. The Federal Reserve does not own any gold, but it does have vaults that contain vast amounts of gold and silver. The New York Fed's gold vault, located 80 feet below street level and 50 feet below sea level, is protected by a 90-ton steel cylinder and currently holds approximately 507,000 gold bars. The Federal Reserve reports information on gold and gold certificates in its H.4.1 statistical release, with the value of gold certificates held by the Federal Reserve reported under Gold certificate account.
| Characteristics | Values |
|---|---|
| Ownership of gold bars | The Federal Reserve does not own any gold bars. The Federal Reserve Bank of New York acts as the custodian of gold owned by account holders such as the U.S. government, foreign governments, other central banks, and official international organizations. |
| Gold bar composition | Gold bars contain a small amount of at least one other metal, such as copper, silver, or platinum, to preserve their shape. |
| Gold bar weight | Gold bars weigh approximately 400 troy ounces (12.4 kilograms) of pure gold. |
| Gold bar purity | Mint gold bars are a minimum of 99.5% fine gold, while coin bars are made from melted gold coins. |
| Gold bar shape | Gold bars cast in the United States before 1986 were rectangular bricks. Currently, gold bars conform to the international standard of a trapezoidal shape. |
| Gold bar storage location | The majority of U.S. Treasury gold is stored at the United States Bullion Depository (Fort Knox), with smaller amounts at the Mint's Denver and West Point facilities. The Federal Reserve Bank of New York also stores gold bars in its vault. |
| Gold bar security | The Federal Reserve Bank of New York's gold vault is protected by a comprehensive multilayered security system, including a 90-ton steel cylinder guarding the only entry. |
| Gold bar handling fees | The New York Fed charges account holders a handling fee for gold transactions, including when gold enters or leaves the vault or changes ownership. |
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What You'll Learn
The Federal Reserve Bank of New York stores gold bars
The New York Fed's gold vault is located in the basement of its main office building in Manhattan. The vault was built in the early 1920s and is guarded by a 90-ton steel cylinder protecting the only entry. The vault is also protected by steel-reinforced concrete walls, 24-hour security cameras, motion sensors, and an armed Federal Reserve police force.
The gold bars stored in the vault are not 100% pure gold, as this would make them too malleable to preserve their shape. Instead, they contain small amounts of other metals such as copper, silver, or platinum, which affect their colour and market value.
The Federal Reserve Bank of New York is the largest gold custodian in the world, storing more than 5,800 tonnes of gold for 36 foreign central banks, foreign governments, and international financial organisations. The gold is stored in compartments, with each customer or country having distinct compartments.
Much of the gold in the vault arrived during and after World War II when countries sought a safe location to store their reserves. The vault's holdings peaked in 1973, shortly after the US suspended convertibility of dollars into gold for foreign governments, containing over 12,000 tons of monetary gold.
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Gold bars are stored for account holders
The Federal Reserve Bank of New York stores gold bars for account holders. The gold is not owned by the Federal Reserve but by account holders including the US government, foreign governments, other central banks, and official international organizations. The Federal Reserve Bank of New York acts as the custodian of the gold, providing a secure location for account holders to store their monetary gold reserves. The gold bars are carefully weighed and inspected upon deposit, and the exact bars deposited are returned to the account holder upon withdrawal. The Federal Reserve Bank of New York charges a handling fee for gold transactions but does not charge fees for gold storage.
The Federal Reserve Bank of New York's gold vault is located in the basement of its main office building in Manhattan. The vault was built in the early 1920s and is said to hold close to 7,000 tons or about half a million gold bars. The gold bars held in the depository are approximately seven inches long, three and a half inches wide, and one and three-quarters inches thick.
In addition to the gold bars, the depository also holds various gold coins, including ten 1933 Double Eagle gold coins and twelve gold Sacagawea dollar coins that flew on the Space Shuttle.
The Federal Reserve also holds a small portion of the gold owned by the US Treasury, which is reported in the "Factors Affecting Reserve Balances of Depository Institutions" table and the "Consolidated Statement of Condition of All Federal Reserve Banks" table. This gold is held in custody for the Treasury by the Federal Reserve Banks as fiscal agents of the United States.
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The Federal Reserve does not own gold
The Federal Reserve Bank of New York acts as the custodian of gold owned by account holders such as the US government, foreign governments, other central banks, and official international organizations. No individuals or private sector entities are permitted to store gold in the vault of the Federal Reserve Bank of New York or at any Federal Reserve Bank.
A small portion of the gold held by the US Treasury (roughly $600 million in book value) is held in custody for the Treasury by the Federal Reserve Banks, as fiscal agents of the United States. The vast majority of this gold is located in the vault at the Federal Reserve Bank of New York, and a very small portion is on display in several Federal Reserve Banks. The remaining 95% of US Treasury gold ($10.4 billion in book value) is held in custody for the Treasury by the US.
The Federal Reserve reports information on gold and gold certificates weekly in its H.4.1 statistical release. The "Factors Affecting Reserve Balances of Depository Institutions" table reports the book value of gold held by the Treasury under "Gold stock." The "Consolidated Statement of Condition of All Federal Reserve Banks" table reports the value of gold certificates held by the Federal Reserve under the "Gold certificate account."
The reported value for "gold stock" is not the same as the reported value for "gold certificates." By law, the value of gold certificates held by the Federal Reserve must be less than or equal to the book value of gold held by the Treasury, and the Treasury has not issued gold certificates against all the gold it owns.
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The Federal Reserve reports gold information
The Federal Reserve Bank of New York provides gold custody as one of several financial services. The New York Fed's gold vault is located in the basement of its main office building in Manhattan. The vault was built in the early 1920s and provides account holders with a secure location to store their monetary gold reserves. Holdings in the gold vault increased and peaked in 1973, shortly after the US suspended convertibility of dollars into gold for foreign governments. At its peak, the vault contained over 12,000 tons of monetary gold.
The "Factors Affecting Reserve Balances of Depository Institutions" table reports the book value of gold held by the Treasury under "Gold stock." The "Consolidated Statement of Condition of All Federal Reserve Banks" table reports the value of gold certificates held by the Federal Reserve under the "Gold certificate account." The reported value for "gold stock" differs from the reported value for "gold certificates." By law, the value of gold certificates held by the Federal Reserve must be less than or equal to the book value of gold held by the Treasury. The book value of the gold held by the Treasury is determined using the statutory price, which has been constant at $42.2222 per fine troy ounce since 1973.
The US Treasury owns the largest gold reserves globally, with 261.5 million troy ounces in gold reserves. The market value of the gold reserves based on the London Gold Fixing as of September 30, 2020, was $493.4 billion.
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Gold bars are trapezoidal in shape
The Federal Reserve Bank of New York acts as the custodian of gold owned by account holders such as the US government, foreign governments, other central banks, and official international organizations. The Federal Reserve Bank of New York's gold vault is located in the basement of its main office building in Manhattan. The vault was built in the early 1920s to provide account holders with a secure location to store their monetary gold reserves.
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Frequently asked questions
Yes, the Federal Reserve Banks store gold bars. The Federal Reserve Bank of New York is the only bank in the Federal Reserve System with a gold vault in its facility. The vault was built in the early 1920s and is located in the basement of its main office building in Manhattan.
The Federal Reserve does not own any gold. The gold is owned by account holders, which include the U.S. government, foreign governments, other central banks, and official international organizations.
Gold bars are not 100% pure gold as they would be too malleable to preserve their shape. Each bar contains a small amount of at least one other metal, such as copper, silver, or platinum.
